LAHORE, June 3: The Punjab government is changing the existing formula for the distribution of fiscal resources among 34 districts of the province, significantly increasing the weightage of their respective populations while allocating finances to them for the development and non-development expenditure in the budget for 2003-04.

The formula will be the basis for the distribution of funds to the districts under the Provincial Finance Commission award which, according to the provincial finance minister, has “almost” been finalized.

The provincial government, which gave the interim PFC award at the time of the announcement of the budget for fiscal 2002-03, is expected to announce the permanent PFC award for the distribution of financial resources between the districts for the next two years either before or with the budget for the next fiscal likely to be announced in the second or third week of this month.

“The budget will be presented before the Punjab Assembly in 8-10 days of the announcement of the federal budget on June 7,” the minister, Hasnain Bahadur Dreshak, said here on Tuesday.

The Punjab government had allocated only the development funds of Rs9 billion for the current fiscal between the districts under the interim PFC award, keeping their current budgets out of it.

However, sources told Dawnon Tuesday, “it proposes to put all the fiscal resources for their development and nondevelopment budgets in one basket to make a formula-driven distribution under the permanent PFC next year”.

The government had distributed Rs58 billion —- Rs9 billion for the development and Rs49 for the current expenditure —- among the districts for the current financial year. Besides, they were also provided additional funds of Rs2 billion.

Next year, the sources said, the districts stand to get around Rs66 billion or 10 per cent more than the current fiscal year for financing their development and current budgets.

Under the interim PFC award, the districts had received 67 per cent funds on the basis of their respective population and 33 per cent on the basis of their level of under-development per capita.

The weightage of population in the permanent PFC, the sources said, is proposed to be enhanced to 75 per cent from 67 per cent. However, they said, the weightage of the districts’ population in the PFC would be restructured when the final figures of the funds to be transferred to the Punjab by the federal government during next year on account of 2.5 per cent GST are conveyed.

The minister said the weightage of population in the PFC award was being raised to strengthen Punjab’s case for the distribution of the federal funds among the provinces under the next NFC award according to the size of their respective populations.

It may be mentioned that the other three provinces are calling for “changing the formula to base the allocation of the financial resources between the federating units on the basis of collection of tax revenue, area, backwardness, etc”.

They do not agree with Punjab’s stand that “population be made the sole basis for allocating resources between the provinces”.